Former Qwest CEO Joseph Nacchio, two former CFOs, and five other former senior executives at the Baby Bell were sued by the SEC for fraudulent accounting at the company; two executives settled their cases. The SEC Litigation Release (here) states that under the direction of the defendants "Qwest fraudulently recognized over $3 billion of revenue and excluded $71.3 million in expenses." The Commission and Qwest settled the case in Oct. 2004, with the company paying a civil penalty of $250 million. The Commission is seeking disgorgement and director & officer bars against the remaining defendants. (ph)